UBS "rogue trader" denies he was addicted to gambling

By Estelle Shirbon

Published November 05, 2012

Reuters

LONDON – Accused UBS "rogue trader" Kweku Adoboli denied on Monday that he was addicted to gambling, saying that big losses on his personal betting accounts were due to his life spiraling out of control.

Adoboli also told a London court that he had been lying to protect his colleagues when he said in an email to the Swiss bank on September 14, 2011 that he was the only person responsible for trading losses of $2.3 billion.

Adoboli, 32, was arrested at UBS offices in the early hours of September 15, 2011, about 13 hours after saying in the email that he had been booking fictitious trades to mask losses he had made on "off-book" positions.

He denies charges of fraud and false accounting, arguing that his methods were known to colleagues, that everything he did was for the benefit of the bank, and that UBS management tolerated rule-bending as long as it was profitable.

Prosecutor Sasha Wass has described him throughout the long-running trial as a gambler who in the summer of 2011 was losing billions of dollars and recklessly increasing the size of his bets in the hope that his luck would turn and he would make all the money back.

"You were an addicted gambler. You were spending every penny that you had to feed your addiction. That's what addicts do," she told Adoboli, citing his personal trading activities at the time.

"NOT AN ADDICTION"

"There was not an addiction," Adoboli said, arguing that spread-betting was extremely common among traders and that it helped them to keep in touch with the market and "to be better traders".

"It's like a taxi driver driving his own taxi home," said Adoboli.

The court has heard that Adoboli lost 123,000 pounds ($197,000) on his IG Index spread-betting account in the year running up to his arrest, and that he had been making payments to short-term loan companies such as Moneybox and Wonga.com.

At the time, his annual salary from UBS was 110,000 pounds, and he had received 129,000 pounds as part of his 2010 bonus. Wass said that meant his disposable income after tax was in the region of 140,000 pounds, most of which had been lost on spread-betting.

"You were taking out pay-day loans to make ends meet. You were not able to live on your enormous salary because you could not stop yourself from gambling," she said.

Adoboli denied this, saying that he had also spent money on helping his mother and extended family in Ghana and his sisters in Britain and the United States, and that he had paid his rent.

He said the large spread-betting losses had come at a time when he was putting all his energy into trying to recoup the trading losses he was incurring at UBS.

"My life became a mess as a result of working too hard ... My life spiraled out of control," he said.

"DIDN'T THINK IT WAS A CRIME"

In a separate strand of evidence earlier on Monday, Adoboli said that many of the details he gave in his email of September 14, 2011, and in meetings with UBS managers and lawyers later that day, were untrue.

"I was trying to protect everybody, not just the desk, not just the senior guys, but also the back office," Adoboli said.

He said that if he had known he would be accused of committing a crime, he would have told the truth about the involvement of others earlier than he did.

"I didn't think this amounted to a crime, so there would be no need to call lawyers or the police," he said.

"I expected that I would explain the trades to them and then I could go home."

Instead, Adoboli was arrested and taken to a police station, and then to prison, where he remained for nine months until he was granted bail in June.

Wass put it to him that that his colleagues had known nothing about his trades, and that he had changed his story and started blaming others when he had realized the seriousness of his predicament.

"You are a very devious liar," she told Adoboli. "You have carefully weighed up what could be denied, what could be proved ... That is how you have conducted your defense, carefully crafted lies."

The trial continues on Tuesday, when Adoboli will be re-examined by his own lawyer, Paul Garlick. After that process is complete, Wass will make her closing speech, followed by Garlick, and finally the judge will sum up the case.